Many dealers, however, are finding success pushing higher-priced AV products to middle class customers who appreciate a quality solution after it is demonstrated to them.
That’s the message from some of the top Runco projector and flat-panel dealers and company executives who have gathered this week for the Runco Mexico Getaway in Los Cabo, Mexico.
“We’re seeing real strong business in the $60,000 segment,” said Steve Ekblad, a Runco dealer representative with Omega sales. “I think the people with that type of purchasing power always have leverage.”
Ekblad and several dealers said the multi-dwelling unit (MDU) market has been particularly strong for high-end flat panels. Ann Johnson, co-owner of Premiere Music & Film Systems, Chicago, said many clients living in luxury condominiums are buying multiple flat-panels, mostly in 50-inch flavors and above.
“Our clients don’t seem to be affected by the market,” she said. “They’re so well position that they can survive the swings. They’re coming to us for performance; they’re not the type to shop Best Buy.”
These dealers, however, offered several lessons for general retailers who are serving consumers in lower tax brackets: Retailers who take the time to demonstrate how higher-margin products often perform better than cheaper ones have a better chance of closing a higher-priced solution. Although these dealers serve a luxury market, many are also driving high-end sales to the middle class.
“People want to buy the best they possibly can. And, in many cases it’s attainable,” Stuart Snowden of Stuart’s Audio-Video, Westfield, N.J., speaking not only of lower-priced Runco products, but higher-quality gear. “For us, it’s never been about the high-end guy, it’s about showing what high-end is all about. There’s a certain type of average consumer who go for it. They’re willing to stretch a bit to have the best experience.”
While the housing slowdown has taken a bite out of custom home theater installations, many consumers are opting to upgrade their current systems, adding new ones to existing homes and transitioning to high-definition systems.
“People are still spending money; you just have to show them their options,” Snowden said. “The worse they can say is no. You can’t get hurt.”
Runco executives are urging their dealers to look at new market segments for additional sales.
Runco is introducing a new Climate Series of plasmas for outdoor use, with a 42-inch model expected to roll out at this year’s CEDIA Expo, as well as lower-priced 1080p and 720p projectors, upgradeable for Runco’s CineWide technology, said Scott Hix, vice president and general manager of Planar, the parent company of Runco and Vidikron.
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There is still key a factor missing in this equation. These customers also need the highest quality content to maximize the performance on all of this high-end hardware they are purchaasing. Dealers should be taking their installations a step further by including HD music and movies with every install and giving their clients the "complete" and ultimate entertainment experience.